Posted by: Karim Ali
Coffee with Karim
How to Tell if a Property Is Worth Pursuing
A house can look great at first and still not be worth chasing.
Before getting too attached, it helps to slow down and look at a few important things properly. That includes the exact location, what similar homes have sold for, what the monthly cost will really look like, how much work the property may need, and whether it will still make sense a few years from now.
Here are the main things we check before moving forward on a property.
1. We look closely at the exact location
A property can be in a good neighbourhood and still be in a weaker location within it. Sometimes that means backing onto a busy road. Sometimes it means being too close to something noisy or unattractive. Sometimes it means future development nearby that could affect privacy, views, traffic, or resale.
I want to know what is around the property now, what may be built around it later, what the neighbours are like, and whether there is anything about the location that could make the home harder to enjoy or harder to sell later.
2. We check whether the price actually makes sense
The best way to judge whether a property is priced fairly is to look at what similar homes have actually sold for recently. Asking prices of similar homes are sometimes helpful, but they do not tell the full story. What matters more is the real sale price of comparable homes, how recent the sales were, how quickly they sold, and how they compare in terms of size, condition, layout, parking, lot, and location.
Sometimes a home is priced fairly. Sometimes it is clearly priced low to attract attention and generate multiple offers. That can be especially likely when offers are being held back or when the property is listed below anything else similar on the market.
The asking price is only a starting point. What matters more is what similar homes have actually sold for.
3. We add up the real monthly cost
A lot of buyers focus mostly on the mortgage payment. That is understandable, but it is only part of the picture.
I also want buyers thinking about property taxes, utilities, insurance, condo fees if there are any, and ongoing maintenance. Maintenance is one of the big ones people tend to forget. Even when nothing major is going wrong, homes still cost money to maintain.
A property that looks affordable at first can feel very different once the full monthly cost is added up.
That does not mean you need to avoid every home with higher carrying costs. It just means you want a realistic picture of what ownership will feel like month to month.
4. We think about resale before making an offer
Even if you plan to stay for a long time, resale still matters.
Life changes. Jobs change. People have kids, pets, or in-laws. People need more space. People move sooner than expected. So when I am looking at a property with a buyer, I am not just asking whether they like it now, I am also asking how the next buyer is likely to see it later.
Some homes are simply going to be harder to sell. That might be because they back onto a busy road, or it might be because the layout is unusual, or because there are too few bedrooms for the size of the home. In many homes, a very small backyard or no real backyard at all can hurt resale too. In other cases, it is something like a very small kitchen or no storage space that turns off a large part of the buyer pool.
Not every flaw is a deal-breaker. But if a property has something that will clearly limit demand later, that should be part of the decision now.
5. We watch for signs the home needs more work than it seems
Some homes show well, but once you look a little closer, it becomes clear there is more going on.
One of the first things I pay attention to is the age of the major systems and whether any bigger projects have already been done. If a home is around the 20-year mark and little has been done to the roof, windows, furnace, or other bigger items, that is worth noting.
I also pay attention to the quality of any updates. Quick renovations done with cheap materials can be a bad sign. So can a lot of fresh paint without much real work being done underneath. Paint is easy. Proper maintenance is harder.
Fresh paint does not always mean the home has been properly maintained.
This does not mean every older home is a bad idea. It just means buyers should go in with open eyes.
Wear and Tear: Your Property Will Not Feel the Same After Tenants
This is something many homeowners I meet with don’t think about when deciding whether to rent out their property.
Even with very good tenants, most rental properties experience more wear and tear than owner-occupied homes. Over time, you should expect that you may need to do some work to bring the property back to its previous condition before moving back in or before selling.
This might include:
- Painting
- Patching holes
- Replacing or cleaning carpets
- Small repairs to doors, cabinets, or fixtures
- General cosmetic updates to make the property feel and look “turnkey” or like your home again
None of this is catastrophic, but it is a cost that should be expected and planned for.
In short:
If you rent out your property for a few years, you may need to invest some money later to bring it back up to the condition you would want it in before selling, unless you are comfortable accepting a slightly lower sale price.
Property Type Matters More Than People Think
In Ottawa, some properties make much better rentals than others.
- Easiest to rent: condos and townhomes, or anything really well located.
- Harder to rent: detached – especially luxury – homes (higher rent = smaller tenant pool)
- Best long-term rentals: small multi-family properties (e.g. a duplex)
This is an important factor when deciding whether to keep a property as a rental.
The Time Horizon Rule
In general, the longer you hold a property, the more likely renting it out will make sense.
- Holding less than 5 years → selling often makes more sense
- Holding 5+ years → renting becomes more attractive
- Holding 10+ years → renting often makes strong financial sense
It’s never guaranteed, but time greatly reduces risk.
Conclusion
This decision is not just about the math of renting. You need to consider.
- Your time horizon
- Your risk tolerance
- Your cash flow
- Your borrowing power
- Your lifestyle
- Whether you plan to return to the property
TLDR; If you’re trying to decide whether to rent or sell, the best approach is to run the numbers for your specific property and your specific situation. The answer is different for everyone.
609
120